Understanding Business Valuators Reports

1. Introduction to Business Valuators' Reports

1.0 Introduction to Understanding Business Valuators’ Reports

2. Restrictions & Limitations of Business Valuation Reports

2.6: Restrictions On The Use Of Valuators’ Reports

2.5: Limitations of Valuators’ Reports

2.4: Levels (or Scope) of Valuation Reports

2.3: Assumptions Used in Valuators’ Reports

2.2: Valuation Dates in Valuators’ Reports

2.1: Purpose of Business Valuators’ Reports

2.0 Key Issues in Valuators’ Reports

3. The Business Valuator as a Professional

3.9: The CBV’s relationship with other professionals

3.8: The CBV as a “Qualified Expert” in Court

3.7: Objectivity of a CBV

3.6: Independence of a CBV

3.5: Engagement letters for valuators’ reports

3.4: Credibility in valuators’ reports

3.3: Practice inspections by the CICBV

3.2: Practice standards of the CICBV

3.1: Code of Ethics of the CICBV

4. Common terminology used in Business Valuators' reports

4.29: Working capital

4.28: Tax shields

4.27: Tangible asset backing

4.26: Synergies

4.25: Sustaining capital expenditures

4.24: “Special purchasers”

4.23: Redundant assets

4.22: Professional judgment and contrasting conclusions provided by multiple CBVs

4.21: Pro forma cashflow statements

4.20: “Price” as used in valuators’ reports

4.19: “Premium” as used in valuators’ reports

4.18: Preferred shares

4.17: Non-voting shares

4.16: Multiples (and capitalization rates) – one size does not fit all

4.15: Conditionally transferable goodwill

4.14: Transferable goodwill

4.13: Personal goodwill

4.11: Going concern

4.10: Free cashflow

4.9: Fair market value adjustments to tangible assets

4.8: Fair market value

4.7: Equity value

4.6: Enterprise value

4.5: En bloc value

4.4: EBITDA – Earnings before interest, tax and depreciation/amortization

4.3: Discount rates

4.2: Capitalization rates

4.1: Capital assets

4.0: Common terminology in valuators’ reports

5. Common Methodologies in Valuators’ Reports

5.21 Weighted average cost of capital (WACC)

5.20 Use of market data in private company valuations

5.19 Tangible asset backing (TAB)

5.18 Sustaining capital expenditures

5.17 Impact of shareholder or partnership agreements on business valuation

5.16 Differences between share valuations and asset valuations

5.15 Reasonableness testing in valuation reports

5.14 Normalization adjustments in valuation reports

5.13 Valuation methodology – market method

5.12 Valuation methodology – discounted cashflow method

5.11 Discounting cashflows

5.10 Valuation methodology – capitalized cashflow method

5.9 Valuation methodology – income methods

5.8 Valuation methodology – adjusted net asset methods

5.7 Materiality in valuators’ reports

5.6 Industry analysis in valuators’ reports

5.5 Taxes in valuators’ reports

5.4 Disposition costs in valuators’ reports

5.3 Discount for lack of liquidity (marketability discounts)

5.2 Discount for lack of control (minority discounts)

5.1 Hindsight in valuators’ reports?

5.0 Valuation methodologies and calculations

6. Influencing Factors in Business Valuation

6.2 Influences on the value of an enterprise – risks

6.1 Influences on the value of an enterprise – earnings

6.0 Influences on the value of an enterprise

6.2 Influences on the value of an enterprise – risks

6.1 Influences on the value of an enterprise – earnings

6.0 Influences on the value of an enterprise

5.21 Weighted average cost of capital (WACC)

5.20 Use of market data in private company valuations

5.19 Tangible asset backing (TAB)

5.18 Sustaining capital expenditures

5.17 Impact of shareholder or partnership agreements on business valuation

5.16 Differences between share valuations and asset valuations

5.15 Reasonableness testing in valuation reports

5.14 Normalization adjustments in valuation reports

5.13 Valuation methodology – market method

5.12 Valuation methodology – discounted cashflow method

5.11 Discounting cashflows

5.10 Valuation methodology – capitalized cashflow method

5.9 Valuation methodology – income methods

5.8 Valuation methodology – adjusted net asset methods

5.7 Materiality in valuators’ reports

5.6 Industry analysis in valuators’ reports

5.5 Taxes in valuators’ reports

5.4 Disposition costs in valuators’ reports

5.3 Discount for lack of liquidity (marketability discounts)

5.2 Discount for lack of control (minority discounts)

5.1 Hindsight in valuators’ reports?

5.0 Valuation methodologies and calculations

4.29: Working capital

4.28: Tax shields

4.27: Tangible asset backing

4.26: Synergies

4.25: Sustaining capital expenditures

4.24: “Special purchasers”

4.23: Redundant assets

4.22: Professional judgment and contrasting conclusions provided by multiple CBVs

4.21: Pro forma cashflow statements

4.20: “Price” as used in valuators’ reports

4.19: “Premium” as used in valuators’ reports

4.18: Preferred shares

4.17: Non-voting shares

4.16: Multiples (and capitalization rates) – one size does not fit all

4.15: Conditionally transferable goodwill

4.14: Transferable goodwill

4.13: Personal goodwill

4.11: Going concern

4.10: Free cashflow

4.9: Fair market value adjustments to tangible assets

4.8: Fair market value

4.7: Equity value

4.6: Enterprise value

4.5: En bloc value

4.4: EBITDA – Earnings before interest, tax and depreciation/amortization

4.3: Discount rates

4.2: Capitalization rates

4.1: Capital assets

4.0: Common terminology in valuators’ reports

3.9: The CBV’s relationship with other professionals

3.8: The CBV as a “Qualified Expert” in Court

3.7: Objectivity of a CBV

3.6: Independence of a CBV

3.5: Engagement letters for valuators’ reports

3.4: Credibility in valuators’ reports

3.3: Practice inspections by the CICBV

3.2: Practice standards of the CICBV

3.1: Code of Ethics of the CICBV

2.6: Restrictions On The Use Of Valuators’ Reports

2.5: Limitations of Valuators’ Reports

2.4: Levels (or Scope) of Valuation Reports

2.3: Assumptions Used in Valuators’ Reports

2.2: Valuation Dates in Valuators’ Reports

2.1: Purpose of Business Valuators’ Reports

2.0 Key Issues in Valuators’ Reports

1.0 Introduction to Understanding Business Valuators’ Reports

6.2 Influences on the value of an enterprise – risks

(Photo by Oliver Sjöström from https://ollivves.com) With an understanding of the basics of the capitalized cashflows valuation method, a business owner will have... View Article

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6.1 Influences on the value of an enterprise – earnings

With an understanding of the basics of the capitalized cashflows valuation method, a business owner will have several clues regarding... View Article

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6.0 Influences on the value of an enterprise

The word “enterprise” refers to a core, distinct business operation, which may or may not be incorporated. The distinction between... View Article

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